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EPF Contributions Will Stop from Next Month if you do not Update this Document. Know Details

The Employees Provident Fund or EPF is an indispensable part of any corporate employee’s work life, and there are several things one would like to know about the scheme. Retirement body Employees Provident Fund Organisation or EPFO, backed by the government, is a scheme which accumulates a part of the employees salary as well as a certain amount from the employers contribution to disburse it post-retirement. On that note, you should also know that it is extremely important to link your Aadhaar card with your Universal Account Number, which is allotted by the EPFO. The UAN is one of a kind number allotted to each employee, which stay with them forever.

The EPFO has extended the deadline to link Universal Account Number (UAN) with Aadhaar number. The deadline has been extended to November 30, 2021. The previous deadline to link the numbers was August 31, 2021. The latest date was notified by the EPFO on November 15 this year. The recent change in section 142 of the Code of Social Security 2020 has made it mandatory to link Aadhaar card with the Employees Provident Fund (EPF) account. The EPFO earlier said it will be effective from June this year.

“In partial modification of the Circular No. WSU/15(1)2019/ATR/529 dated 15.06.2021 under reference, it is informed that the date of completing the seeding and verification of Aadhaar with UAN, is hereby extended till 30.11.2021 and accordingly, the date in Para 1 of the referred Circular dated 15.06.2021 mentioned as 01.09.2021 may be read as 01.12.2021,” the EPF said in a circular.

However, there are many consequences you might face if you do not link your UAN with your Aadhaar number. For one, you will stop getting the employer’s contribution if you do not link the accounts.

“The employers are asked to ensure the Aadhaar seeding in respect of all the contributory members to enable them to avail uninterrupted services of the EPFO and to avoid any inconvenience. EPFO has given employers the responsibility to make employees’ accounts Aadhaar verified. In case if the employee’s EPF account is not Aadhaar verified, it may mean that employer’s contribution shall not be credited into employees’ account (“EPFO June 1 Circular”),” said  Raunak Singh, partner, Avitr Legal.

The retirement body has also updated the filing norms for Electronic Challan cum Return (ECR). The employer can only file for those employees who have linked their Aadhaar to PF UAN, EPFO said. “Employer can file separate ECR for non-Aadhaar seeded UAN after completion of Aadhaar seeding process,” the regulatory body said.

“On June 15, 2021, EPFO extended the last date to seed the Aadhaar number with UAN from June 1, 2021 to September 1, 2021, for filing the ECR. Thus, it is mandatory for the employers to seed the Aadhaar number of its employees with UAN by August 31, 2021 while filing ECR,” added Singh.

The employees will also face a delay in remittance till the time he or she links the accounts, and the data is approved by the employers and authorities. Additionally, they will not be able to withdraw the PF money from their accounts. Employees also cannot take COVID-19 advances announced earlier this year and insurance benefits linked to PF accounts.

On the contrary, there are several benefits of linking UAN with Aadhaar. “This is a progressive step since it would reduce the procedural and compliance requirements of the employer. Additionally, the employees would also get a real time update of the contributions being credited to their accounts on a monthly basis, while the process of withdrawals, transfer and interest credits would also become easier. The move is also in line with the Government’s recent drive towards mobilizing a national database for unorganized workers and would aid in extending the benefit of various welfare schemes to millions of underprivileged workers,” said Vaibhav Bhardwaj, partner, IndusLaw.

“There are a few advantages, like reduction of errors, information remains consistent and accurate across accounts, chances of duplication or fake accounts reduces, etc. Eventually managing one universal account will become the norm by linking Aadhaar with not just the EPFO account but others too,” said Sajai Singh, partner, J Sagar Associates.